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If the pga_aggregate has a non zero value (my example it does not). The
workarea_size_policy should be set to manual. In my example, it is set
to auto (most likely because I have it set in the init.ora file).

My question is what forces areas that use memory-intensive SQL operators such as sort, group-by, hash-join, bitmap merge, and bitmap to be
automitically sized? Is it setting the pga_aggregate_target=0 or i is it
having a workarea_size_policy=auto. Do I really need to set workarea_size_policy='auto' in my init.ora file if I am using AMM?

My second question, is there a way to monitor AMM vs setting parameters
manually. I read that AMM should really not be used for OLTP type of systems,
though the artice was written for Oracle 10g and I am running 11.1.0.7

AMM did not come out until 11g. Which AMM in 10g are you referring to? There is ASMM, but that is not the same as AMM in 11g. Close, but different enough. Where did you read not to use AMM for OLTP systems?